I connected a rotary encoders grey code Com (center pin) to A0, grey code pin 1 to arduino GRD and a 64k resistor to encoders gray code pins 1 and 2.then I enabled A0 internal pullup resistor and wrote a code to determine whether the encoder turned left or write and used timer one to check for input changes It seems to be working wellthis is the code I used it requires timerone library http://playground.arduino.cc/code/timer1

#include <TimerOne.h>boolean gotHigh=false; //Used to check if it went to High valueboolean gotLow=false; //Used to Check if it went to Low valueboolean valueHigh=false; //Used to check if the last value is high or low to determine the rotationboolean hasTurned=false;

Cool. I'm playing with a pec11 right now. I saw a youtube article about wiring it up with a debounce circuit and it was not working. I'm using a 328 so my inputs are limited. I will be watching your work here and trying something similar my self.